Clifford Chance and Gide Advise on €3 Billion in Financing Linked to Carbon Footprint Reduction
The deal, for a French infrastructure group, ties credit margins to success at meeting climate goals.
March 06, 2020 at 04:07 PM
2 minute read
Clifford Chance and Gide had lead roles advising on a €3 billion ($3.4 billion) debt refinancing and credit-line extension tied to carbon-footprint reduction, a nascent but growing trend among companies and their bankers.
Eiffarie, a joint venture of the French infrastructure group Eiffage and the Australian financial group Macquarie, took out the debt to finance its 2006 acquisition of APRR, which runs the 2,300-kilometer autoroute network of superhighways through the eastern half of France.
The deal, which closed Feb. 27, refinanced €1 billion ($1.1 billion) of the original acquisition debt and renewed a €2 billion ($2.3 billion) credit line, Gide said in a statement. Both financings carry credit margins, or interest-rate premiums, linked in part to Eiffage's performance at improving health and safety and reducing its carbon footprint.
In announcing the refinancing Feb. 20, Eiffage said that improvement on either of the measures would lead to a reduction in the credit margin, while "a deterioration would lead to compensation measures in favor of associations or a foundation working in the general interest."
Clifford Chance advised Eiffage and Macquarie with a banking and finance team out of Paris led by Daniel Zerbib and including counsel Chloé Desreumaux.
Gide advised the lenders, with a team headed by banking and finance partner Laetitia Lemercier. A group of 18 financial institutions participated: Banco Sabadell, BBVA, BNP Paribas, CaixaBank, CIC, Commerzbank, Groupe Crédit Agricole, HSBC, Intesa, La Banque Postale, Mediobanca, Mizuho, MUFG, Natixis – Groupe BPCE, Santander, SMBC, Société Générale, and UniCredit.
As pressure has grown on all sectors of the world economy to help combat climate change, companies are increasing their use of financial tools such as credit lines with interest rates linked to carbon footprint reduction targets and other social goals.
Creditors extended a $1.1 billion ($1.2 billion) revolving credit facility in July 2019 to Yara International, a Norwegian agribusiness group, with a margin linked to Yara's progress at meeting 2025 goals for sustainable manufacturing and reduction in greenhouse gas emissions, according to Yara.
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